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I agree nimrod's logic. exquisitively put, quite beautifully. however HMRC have 'ruled', their logic will be weaker than nimrod's. HMRC decision is wrong, flawed, and was likely made by a jobsworth incompetent negligent (90% of all humans).
today spoke with HL who confirm received HMRC decision to remove from ISA. consequently DCU's which so far have been left in ISA will be automatically transferred to to 'fund & shares account' (ie removed from ISA wrapper) shortly - likely within 7-14 days.
DCU spread has been tight 1.69 - 1.79 with only a million sold. so pi's are not selling (good). and if they do, if they nominate price wanted at say 2.0 or 2.5, likely won't get it.
i will do exactly as nimrod. and if called out, will argue the case right up to HMRC appeals procedure. I detest incompetence, negligence, and legalised theft. my advice to all is to copy and save nimrod's post. if the f eckers want to steal your money, make 'em fight
Bids
I view the dcu’s as a depreciating asset insofar as they expire with no value after 3 years.The expectation of payments from the dcu up to the maximum represents future value rather than npv.
To get an npv of the value of the dcu’s would require a discount rate to be applied to the potential payments that would take into account the risks attendant to the price of oil,the timing of any payments and the risk of prax creative accounting and ofcourse the zero dcu value after 3 years.
The dcu market price at inception was and still is 1.77 p at which apparently some trades have taken place.
So 1.77 p surely represents an independent assessment of the dcu value before any payments have been made.
For myself ,I regard any payments from the dcu’s as a compulsory payment to me resulting from a court enforced take over of my tax sheltered Isa holdings by prax.The dcu’s are still registered in my Isas
Accordingly I shall not engage in any Cgt declarations or income tax declarations on dcu payments and will vigorously engage with the revenue if they reject that approach.
Today I have received a .0177/DCU payment into my A J Bell ISA. Totals £1764. Down as a value against my DCU rather than cash.
We PI's know they are as "thick as thieves" at board level. They tried and failed before to "steal" / give the company away but unfortunately they got away with it this time in plain sight!
Fantastic deal for Prax and pay us pittance in 2026 paid for from revenue on OUR oil!
Would love to find out how many on the board got/get "sweeteners......
I’ve been thinking about the CGT impact on cash receipts from the DCUs following transfer out of an ISA.
Surely the DCU was part of a 12.5p consideration for each of the shares in HUR that took place inside the ISA wrapper. Accordingly, when the DCU is transferred out of the ISA it should be transferred at a value equivalent to the NPV of the 6.48p it represents. HMRC are keen that transactions be ‘arms length’ and that would surely be the case here.
Worst case scenario would be to receive 6.48p in 3 years at 5% discount = 5.56p value today. More accurate phasing of payment expectations would lift this figure, but it would not go down.
This would reduce any gain to the surplus over 5.56p/DCU.
…….or am I dreaming?
Anybody out there still reading this forum, I would be interested to hear your take on it.
All my opinion, this is not financial advice. DYOR
And for the record - neither details nor evidence was ever provided of the purported '7.8p unsolicited offer' rejected by HUR which provided the justifying rational for the Formal Sale Process to be instigated. Given the absence of such (without good reason), I have no faith that any such offer was received. Alternatively, that if one was, it was a bogus bid instigated by agreement with another party in order to provide justification for an FPS to be conducted.
So disgusted at Prax being gifted HUR, first time logging in for weeks. And so things begin to play out confirming worst fears:-
DCUs - Since HL messaged clients on 18 July stating DCUs can't be held in ISA, most of us will get tax-stung. For thoroughness am awaiting phone call from HL confirming HMRC confirmed such in writing to them, but regard the call as formality.
BRENT - today$86.7 & slowly creeping up as supply tightens. I expect it to be clear by early 2024 that HUR's P6 standalone figures were fairytale, and markedly greater than Prax's slightly higher promised P6 figure.
LICENSES - scared of losing election, Tories blinked first and will issue 100+ new N. Sea/ Shetland licences. Labour, if it wins election, won't reverse licenses decision as would have done similar post-election win. Let's wait to see if P8 now revisited, + other goodies spring up to help now privately owned HUR make a fortune & rub our noses in it further.
DCU's again - some will argue HUR doing well enables us to get full DCU money (less tax). That may be, but why should we be grateful for a shilling when a pound was stolen from us? And remember there is often a slip between cup and mouth.
P6 - continues pumping away like a good 'un, problem free
Deferred Consideration Unit, a kind of promissory note of a circumstances based future payment.
Sorry to be so ignorant but what is DCU please
H&L informed me that my dcu's if not sold would automatically be transferred into my fund and share account from my isa after July 31st. If you don't have a fund and share account suggest you aquire one.
Will be very interesting to see if this news provides some support to DCU’s going forward
I messaged Hargreaves Lansdown regarding the tax treatment of DCUs, either disposal or distributions received. This was the reply I received. I held all my HUR shares in my SIPP.
"I can confirm that any proceeds received from the Prax Exploration & Production plc DCUs will be issued into your HL SIPP Income Drawdown account, and these will be part of the pension."
Good news for me at least.
Halifax Share Dealing have now transferred the DCU's from my ISA to my SDA.
Thank you for your reply
Mariog
If that question was addressed to me Halifax Share Dealing. I used the abbreviation HSD assuming it would be known. HSD also provide the brokerage service for Iwed and Lloyds. The ex dividend date for the two dividends totalling 5.19p has been confirmed as the 6th June. HUR never mentioned the ex dividend date and it seems the market failed to take note as the sp would otherwise have adjusted to reflect the dividend.
Miffed!
"So when I sold it was a welcome surprise to receive the 5.19p dividend on top of the 7.64p sale proceeds."
If you sold your shares pre suspension you should not have got that 5.19p payout. It is a mistake and will be taken back at some point
What broker?
“Stuck with DCUs till end of 2026”
This why I sold my Sipp holding. Having enquired HSD told me they would not participate in the matched bargain facility so it meant I would not be able to withdraw and close my Sipp until the end of 2026. The only alternative being to go through the rigmarole of transferring to another provider.
So when I sold it was a welcome surprise to receive the 5.19p dividend on top of the 7.64p sale proceeds.
Same said my broker. Stuck with DCUs till end of 2026
I asked HL if I could sell my DCU's from my ISA to my SIPP. Answer no because they are not formally trade-able.
Thanks for the feedback, will double check and contact ii.
All best in future, hopefully more knowledgeable people will keep in contact on here and update on thinking /guessing of possible future payments as they (IF) approach every 6 months
Kever - smart move if you can get the purchase; I know we can hold in a SIPP but can we buy for the SIPP?
I have an order in with JPJ. I am after 2,000,000 DCU's and will pay the 1.77p mid market price. No takers yet.
Has anyone considered buying DCU's?